Sabadell Bank has announced record profits, allowing it to significantly increase payouts to shareholders.
Record Profits and Shareholder Rewards
Sabadell reported a profit of €1.83 billion for 2024, a 37% increase from the previous year. Profits for the fourth quarter were €532 million, up 19% year-on-year. Thanks to these results, Sabadell plans to distribute €3.3 billion to shareholders from 2024 and 2025 profits. This is higher than its previous target of €2.9 billion.
The payout plan includes a cash dividend of 20.44 cents per share for 2024. The same or a higher dividend is expected for 2025. The plan also includes share buybacks, ensuring shareholders will receive about 61 cents per share over the two years.
“We are giving record payouts to shareholders. No other Spanish bank plans to distribute this much,” said Chairman Josep Oliu. “We begin the year with confidence and ambition,” he added.
CEO César González-Bueno praised the performance, saying, “Banco Sabadell’s record 2024 profits show our strong growth. We are confident in delivering long-term value.”
Sabadell credits its success to strong retail and business banking operations in Spain, along with its UK subsidiary TSB Bank. TSB posted a net profit of £208 million in 2024, an 18.9% increase from the previous year. This helped TSB contribute €253 million to Sabadell’s profits, its highest since Sabadell acquired it in 2015.
Higher net interest income also played a role. Sabadell’s net interest income reached €5.02 billion, a 6.3% annual increase.
BBVA’s Takeover Challenge
Sabadell’s earnings announcement comes as it defends itself against a hostile takeover bid from BBVA. This is BBVA’s second attempt to acquire Sabadell in four years. Sabadell argues that BBVA’s offer undervalues the bank and its growth.
Supporters of the merger believe bigger banks would strengthen Spain’s economy by increasing lending capacity. However, critics worry that a merger could lead to monopolies, harming consumers.
Spain’s antitrust body, CNMC, extended its review of the takeover in November. This delay could push the deal into 2025. BBVA may have to make more concessions to gain approval.
While Spain’s government initially opposed the merger, Prime Minister Pedro Sanchez is now more neutral and will defer to CNMC’s decision. However, the government still has the power to block the deal. Catalan politicians have also raised concerns, fearing that Sabadell’s role in Catalonia’s economy could shrink after the merger.
Last month, Sabadell announced it would move its headquarters back to Catalonia, a move seen as part of its strategy to resist the takeover. The bank’s decision to increase payouts is another way to show its strength. By proving it is profitable and independent, Sabadell hopes to reduce support for the takeover.